Archive for December, 2008

29
Dec

And what do you do?

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You know that moment when someone you’ve just met asks the occupation question?

“I’m in branding … which is much more than making logos. It’s marketing actually … but not the salesman kind. And interactive … you know, with computers?”

It takes too long to explain! Doctors, lawyers and engineers say it in one word, then get specific about their specialties as the conversation ensues. For crying out loud, we’re professional communicators — why can’t we invent a more succinct description for our profession?

I used to say I was in advertising. Like in Mad Men. By definition, advertising means sponsoring a message in a mass medium (TV, radio, print, etc.) with the intention of persuading consumers to buy something. But ad agencies have always done more, including research, direct mail, promotions, packaging, interactive marketing, even PR.

“Advertising” is too limiting of a description.

PR has the same problem. The Public Relations Society of America offers a lengthy definition of PR that centers on developing effective relationships between various audiences (publics). This might involve actually selling something, although some PR practitioners don’t like to admit it. “Public relations” is too narrow a word to describe all that PR firms do (which sometimes includes advertising).

Corporate communications as a description has the opposite problem: it’s too broad. It means passing information from the organization to both internal and external audiences. Couldn’t that mean a phone call? The International Association of Business Communicators‘ description also includes teaching and training. “Corporate communications” is too vague.

How about marketing? Historically, it meant everything involved in taking goods to the marketplace, as in chickens or cabbages. Now, its meaning has expanded to include services and ideas as well, or as the American Marketing Association says, “offerings that have value.” Still, it’s all about selling, which is why some sales reps call themselves marketing reps. The phrase “integrated marketing” seems redundant.

“Marketing communications” is a shotgun marriage attempting to narrow the definition of “communications” while broadening the meaning of “marketing.” Like “jumbo shrimp.” It’s little but it’s big.

“Branding” or “brand management” seems like a good solution, as it means bringing all of the tools — research, marketing, advertising, PR, direct marketing, interactive marketing, promotion, publicity, packaging, event management, etc. — to bear on building brand loyalty. Interbrand publishes an annual ranking of the value of the top global brands. Unfortunately, many people still think branding is limited to creating logos and identity standards.

And none of these descriptions ever imagined the emergence of direct, database and interactive technologies.

So … you’re at the cocktail party and someone asks, “What line of work are you in?” What do you say?

22
Dec

The ROI for social media is the value of brand loyalty

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Imagine for a moment that you are a disgruntled customer. (This is easy for me.) You’ve had a bad experience — let’s say a faulty product or poor service. You complain at the store. A savvy clerk listens, apologizes, addresses your concern, and solves your problem to your satisfaction.

Now, imagine this same scenario was resolved online in a social media forum. Either way, you’re pleased with the result.

If many of your purchase experiences are less than ideal (like mine are), this resolution is a pleasant surprise. You think to yourself, “This is the way life should be!” You tell a few friends about your experience. Your feelings toward the brand are more positive. Your loyalty has been (at a minimum) maintained, and perhaps even deepened.

Here’s an example at Jason Sander’s channel on Now Public about how JetBlue solved a customer’s problem: “JetBlue Twitterer gets customer a wheelchair.”

What is this positive experience worth to the brand? In other words, what is the ROI of keeping the customer happy? What is the financial value of brand loyalty?

Social media marketing is new, but measuring the value of brand loyalty isn’t.

In his white paper, “Strategic brand value: Advancing use of brand equity to grow your brand and business,” Michael Leiser of Prophet says, “The measure of customer loyalty also has a distinct tie to financial performance, in that loyal customers make repeat purchases of their brands of choice over the lifetime of their relationship with them. The ability to maintain loyalty translates into higher future profits per customer.”

In Jason Fall’s post, “What is the ROI for social media?,” and the subsequent comments, he addresses this point in his response to Amy Nowacoski: “It’s about the life of the consumer, not the cling of the cash register. Give me 100 people who will buy my stuff for the next 15 years over 10,000 who will buy it today every single time.”

According to a consumer branding study by management consultants Kuczmarski & Associates, brand loyalty drives up to 70% of all purchase decisions. Brand Keys, a research consultancy specializing in customer loyalty and engagement metrics, showed that in increase in customer loyalty of only 5% could increase lifetime profits per customer by up to 100%.

Bottom line: Loyalty has always been the goal of branding. Brand loyalty has financial value which can be measured. And social media is clearly a promising channel for building loyalty. Just ask @metschick if she will fly JetBlue again.

15
Dec

In defense of traditional media

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Bashing traditional advertising media is popular now.

- Viewership, listenership, and readership is declining.

- It’s expensive.

- The kids ignore it — it skews old.

- Usage of the internet continues to usurp time spent with other media.

All true. But mass media does something very well — it reaches a lot of people.

Traditional media is ideal for launching new products, building awareness, and pushing trial.

True, it can’t go 1:1 with consumers, but it can target geographically, demographically, and psychographically, as well as by daypart.

Radio didn’t kill TV. Cable didn’t kill broadcast. Satellite didn’t kill cable. And interactive won’t kill traditional.

There are lots of tools in the marketing and communication toolbox. They all have strengths and weaknesses. Sometimes you need a scalpel; sometimes a sledge.

Can you be successful without interactive? Not anymore.
Can you be successful with only interactive. Some can. Zappos is an oft-quoted example.
Most smart marketers use a selection of tools, both traditional and non.

Case in point: The Obama campaign has been widely recognized for its groundbreaking use of interactive and social media during the presidential campaign. Note: He also spent $250 milllion on TV.




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